Key Levels and Targets: Gold’s Potential Reversal and Uptrend Continuation

Gold Forecast Video for 26.07.23 by Bruce Powers

Gold further retraces its prior advance as it falls below yesterday’s low of 1,953. Subsequently, support was seen at 1,952 leading to an intraday bullish reversal and counter trend rally. The low of the day exceeded the 78.6% Fibonacci retracement and didn’t quite make the 88.6% retracement level at 1,950 nor the 34-Day EMA at 1,949. Today’s lows are around the maximum allowed for a retracement while maintaining the validity of the dominant trend. Nevertheless, the subsequent bullish price action off a significant retracement low tells us that the correction might be over.

Today’s High of 1,966 Key Level for Bullish Signal

Given that it is late in Tuesday’s session, it is unlikely that gold exceeds Monday’s high of 1,968 today. For Wednesday’s trading session a rally above today’s high of 1,966 provides the first indication of a daily bullish reversal. A daily close above that high will then confirm the reversal.

Initial Target at 127% Fibonacci Extension

Once the correction is complete, as confirmed by a daily close above 1,966, gold will have an initial target of around 1,997. That is the 127.2% Fibonacci extension of the current retracement. The next higher target zone is around the 61.8% Fibonacci retracement around 2,010.

A new internal uptrend line has been connected to today’s low assuming that it is complete. Of course, a decline below today’s low is short-term bearish and indicates a deeper retracement may be in the works that could lead to a continuation higher for the larger rising bull trend.

Monthly Bullish Reversal Triggered but Did Not Yet Confirm

Gold triggered a bullish reversal on its monthly chart last week with a rally above 1,983. However, it did not close above that high yet, leaving the breakout unconfirmed. Subsequently, a new monthly bullish breakout should occur with this current rally. Once that happens the higher targets come into view. Gold last bottom in September at a low of 1,615. It has had two legs up followed by corrections so far and is currently working on its third leg up in the trend.

Watch the added internal uptrend line added to today’s low. Its higher slope shows upward momentum increasing off the June 29 low at 1,893.

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